Industry Megatrends Mobility and connectivity Consumer Empowerment Engagement DEVICES CONSUMERS RETAILING Mobile Connected Devices M-commerce Showrooming Social More $ from fewer customers Relationships, community Partnerships
Source: CEA, U.S. CE Sales and Forecasts, July 2013 6.6%7.7%3.7%0.2% 4.5% % Growth:
CE Big Five Source: CEA 58%41%65%62%73% % HH Owning 2013 Shipment Dollars (Billions)
Cell phone that is not a smartphone Dedicated e-reader Portable game device Camcorder Portable digital audio/MP3 player GPS or navigation device Video game console Desktop computer Digital camera Tablet computer DVD or Blu-ray Disc player Laptop/netbook computer Smartphone HDTV At immediate risk of becoming obsolete Most at risk in the near future Source: CEA, 15 th Annual CE Ownership Study, April 2013
Trending in Technology Ultra HDTV Wireless Speakers Soundbars Headphones Xbox ONE, PS4 Wearable Tech VIDEO AUDIO GAMING MOBILE CE returns watchlist? CES Tech Zone
% of CE Dollar Sales by Macro Channel 4Q End Sept 2013 Source: TraQline US Consumer Survey – Total CE
Internet Retailers Continue to Gain $ Share 11-12 Change % 12-13 Change % % 4Q End Sept 2013 Discount Store0.40.123.5 Elec/majap Store-0.230.1 Direct / Internet1.01.715.9 Office Supply-0.3-0.23.4 Computer Spec-0.716.8 Other0.10.010.3 $ Market Share Source: TraQline US Consumer Survey – Total CE
CE Dollar Market Share: 4Q End Sept 2013 Source: TraQline Dollars R4Q Q2’13
Retailing Trends Big Box Retail Competing on Price Customer=Commodity Store within a Store Brand Stores Specialty Stores Pop-Up Stores SUNRISE SUNSET
CE Superstores Redefined Smaller Footprints Store within a Store Solution Selling Relationships Destination, Demos Service
Impact to Returns Brand and specialty stores potentially better at solution selling. Retailers emphasize service; offer set-up Online: more purchases ‘in absentia’? Value mix moving up (higher expectations?) GOOD BAD
Spending on Consumer Electronics Annual Household Spend Source: CEA CE Ownership and Market Potential Study (2013) Base: U.S. adults (n=2,000) 2012 2013 2012 Average Annual Consumer Spend
Where Consumers Browse and Research CE Source: CEA Multi-Channel Alignment in CE Retail (2013) Base: Online U.S. Adults (n=1,027) Question 4: “How often do you use each of the following retail channels when browsing for and researching electronics products?”
Omnichannel Marketing 50% of consumers will use a mobile device to help them shop for CE. 15% 2013 Holiday Mobile Channel Sales Of Online Holiday Sales 8.4 Billion Dollars CEA Holiday Research:
Pre-Purchase Research Activities Source: CEA, Millennials: The New Face of Retail (2013) Base: Online U.S. U.S. Consumers ages 13+ Q: Which of the following activities, if any, did you do before purchasing the electronics product you purchased most recently?
General In-Store Pre-Purchase Activities Source: CEA, Millennials: The New Face of Retail (2013) Base: Online U.S. U.S. Consumers ages 13+ Q: Which of the following activities do you usually do at a BRICK AND MORTAR STORE before purchasing an electronics product?
Mobile Device Used for Shopping at Physical Store 15% 2% 7% 13% 26% 37% Source: CEA Multi-Channel Alignment in CE Retail (2013) Base: Online U.S. Adults (n=1,027) Question 20, “How often do you use a mobile device, such as a smartphone or tablet, when shopping for electronics products in a retailer’s physical store?” Every time (100%) Usually (75-99%) Often (50-74%) Sometimes (25-49%) Rarely (1-24%) Never (0%) 22%
Impact on Returns More than 1-800 number and web-page. Consumers help themselves – Set-up, troubleshooting, repair Compulsive Buying? Gluttony of online purchasing GOOD BAD
CE Product Purchase Drivers Source: CEA, Millennials: The New Face of Retail (2013) Base: Online U.S. Consumers ages 13+ Q: When you are deciding which electronics products to buy, how important are each of the following in your decision process?
Experience & Assortment Increasingly Important in Store Selection Source: TraQline Units R4Q Q2’13 % %
Impact to Returns More to the buy than just price. Trusted brands Shoppers seeking experience and know-how. Bargain hunters will persist Lower consumer tolerance for product/set-up issues? GOOD BAD
Theme for 2014 CES DEVICES CONNECTIVITY CONTEXT
Smartphones Trends for 2014 – Curved, semi-flexible screens Samsung and LG Will trickle down to other OEMs later – Pushing the limits of pixel density (PPI) – Much larger batteries – 4K video capture – More size experimentation
Smartphones Samsung Galaxy Round – Curved 1080p AMOLED display – MSRP ~$1300 (import) – US release early 2014 – Same specs as Note 3 LG G Flex – Curved, flexible 6-inch 720p screen – MSRP ~$1000 (import) – Screen can flex up to 88 lbs force
Smartphones Huawei Ascend Mate II – Follow-up to 2013 CES debut – 2GB RAM, octa-core processor – Likely 6-inch 720p screen Sony Xperia Z2 – Follow up to 2013 CES launch – Sony’s 2014 flagship – 20MP camera, 4K video capture – Water and dust resistant
Tablets Trends for 2014 – Size experimentation above 10.1 inches – Dual operating systems – X86 based designs might get some attention
Tablets Panasonic ToughPad 4K – 20-inch Windows 8.1 tablet – 2840x2560 IPS screen – Designed for “creatives” with stylus and Intel Core processor Huawei PhoPad – Rumored CES release – Competitor to Asus PadFone – Smartphone docks into tablet – Asus TODAY announced PadFone v2 coming to US in 2014… Samsung Galaxy Note 12.2 – Rumored to be in production – Possible CES debut?
TVs: UHD 4K and Beyond Trends for 2014 – Ultra HD everything, everywhere – Curved (and possibly flexible) displays – More OLED promises? – What about Ultra HD content 2013 Netflix announcement
TVs: UHD 4K and Beyond LG Curved OLED TV – 77” curved OLED – 3D and SmartTV capable Flexible TVs – Korean sources report that Samsung and LG may demo flexible TVs – Manipulate viewing angles for best possible picture – What about 3D? Samsung 111” Ultra HD – Claim: World’s largest 240 Hz Ultra HD TV Dish Network Virtual Joey app – Allows Dish customers access to content on other devices (consoles, SmartTVs) – Allows access without STB
Health & Fitness Trends for 2014 – Product mix is all over the map – Lots of traditional products with smartphone integration – CE bridges gap between electronics and other industries.
Health & Fitness Sleep Number x12 Bed – Allows for voice- controlled adjustments – Sleep tracking tech integrated with sleep patterns and quality data Reebok Checklight – Checklight detects concussive impacts to athletes – Concussions in youth sports are a major concern
3D Printing Trends for 2014 – A media darling, 3D printing is maturing – Format wars? Extrusion vs. stereolithography – Price vs. output quality
3D Printing WobbleWorks 3Doodler – World’s first 3D printing pen – Heats and cools plastic as it passes through the pen – $100, available Feb. Pirate 3D “Buccaneer” – Began as a Kickstarter project – High-res 3D printer for consumer use – Has its own “app store” to download design files – $500, available April
Wearables Trends for 2014 – Wearables will be everywhere Smartwatches will be the main focus – Most wearables will be focused on the sensors embedded in them – Innovation for wearables will be in software and how much like a “regular accessory” they look Geek chic is not going to work for everyone
Wearables Neptune Pine Smartwatch – Takes a SIM card, requires no additional phone – Runs full Android OS – 2.4” screen, dual 5MP cameras – Started in 2013 as a Kickstarter project Qualcomm Toq – Works with Android smartphones – Uses an always-on Mirasol e- paper display – Charges wirelessly and lasts for several days between charges
Parting Thoughts Mobile technology: the epicenter for returns? The channel continues to innovate. – Engagement: SwS, apps, social, service, stores – Omnichannel Marketing Price still important, but other factors rising. – Changing the narrative CES 2014: Devices, Connectivity, Context Steve Koenig Director, Industry Analysis Consumer Electronics Association @KoenigSteve skoenig@CE.org